Chapter 20 Financial market implications of India's pension reform

Abstract

India's planned pension reform will open the sector to private fund managers. Drawing on international experiences, the chapter highlights pre-conditions for the reform to kick-start financial development, including (i) the buildup of critical mass, (ii) sufficiently flexible investment guidelines and regulations, and (iii) concurrent reforms in capital markets. Given the limited scale of the planned reform, the key challenge for India is to achieve sufficient critical mass. Options include granting permission for existing workers to switch to the new system or outsourcing all or part of the reserves of private sector provident funds to the new pension fund managers.

Citation

Poirson, H.K. (2007), "Chapter 20 Financial market implications of India's pension reform", Kim, S.-J. and Mckenzie, M.D. (Ed.) Asia-Pacific Financial Markets: Integration, Innovation and Challenges (International Finance Review, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 425-443. https://doi.org/10.1016/S1569-3767(07)00020-9